The comment below was written by faithful reader and commentor Lynn Willis in response to a story about AOGA’s annual luncheon:
Our elected officials brought us this legislation and they deserve to be solely responsible for the effect of what they did. Only time will tell.
We all hear the claims that passage of SB 21 brought an immediate huge financial loss to the state and counter claims that SB 21 brought immediate capital spending by the producers to increase production. Neither of those claims could possibly be true in the short time since passage of SB 21.
According to the proponents of SB21, state taxes are holding back oil production. If SB21 is repealed and production/state revenues continue to decrease, how will you feel for the next decade when all you will hear from the producers and proponents of SB21 is “I told you so,” because they will then have license to blame all their problems on the repeal?
Therefore, I will vote “NO” and let those who supported this legislation have the time to “put up or shut up” and thereby put myself in a “win-win” position by either benefiting from increased state revenues or by being able to clearly understand that this generation of politicians in the political majority have no idea what they are doing.
Wow! You do realize that oil prices are incredible volatile, right? The “breakeven” point is about $105/barrel. When you subtract the awesome credits from ACES, at $105/Barrel, the tax structures are roughly the same.
What’s ANS selling for right now? Around $110…..meaning ACES is already beating SB21, a point even Scott Goldsmith, paid by the industry, admitted.
If you think oil prices are going to tank back to $30/barrel then Banana Republic SB 21 is for you
You realize that the state is getting roughly the same amount of revenue under SB 21 as it would have under ACES? What is the state’s fair share anyway? Where do you draw the line?
I am impressed with J. R. Meyers’ willingness to rethink his position on SB 21. I don’t know JR; however, a candidate for anything that iis willing to keep an open mind aand listen, learn from others is always good. SB 21 could have been better as is the case with many laws that are passed. Regardless of one’s position and beliefs on SB 21, I feel strongly that there is one thing worst – – the reeal of SB 21. A repeal isn’t a plan, its an angry response and a political agenda that is willing to throw the state’s economy under a bus in exchange for a philosophical victory. On SB 21 it is mostly the liberal state House and Senate Democrats. Still Republicans shouldn’t be quick to oint their fingers and complain. In many respects, it is very similar to what Senators Cruz and Lee were doing at the federal level when their leadership was resonsible for shutting down our federal government and hurting the nation’s economy in the name of a win for their political philosophy. So, I applaud J R Meyers – – he seems to have more sense, at least an open mind, than do many of the Democratic legislators in the state capitol.
…greater confiscation of everyone’s wealth.
I am reconsidering my stance on Referendum #1. I had signed the petition to bring it to a vote of the people. It is good for the voters to have their say on this. I really hate the dubious way it passed through the legislature. We need to make sure that our government is transparent, ethical and accountable to the People of Alaska. At the same time, we also need to make sure that Alaska has a stable, healthy and welcoming investment climate. We cannot allow our economy to be undermined by reckless spending, leading to the greater of everyone’s wealth. I do not want to see an income tax in Alaska. I do not want to see a statewide sales tax in Alaska. I do not want to see the PFD fund raided or eliminated. I do not want our state savings fund plundered. I do not want to see our future go down the drain at $7 Million a day! I do not want to continue to feed an unsustainable and morally wrong economic model which is built to collapse.
All of this is right out of the No on 1 propaganda machine.
“We are seeing more drilling, new companies coming, more drilling and more production and we are no longer giving the big three huge rebates for their spending. This is simply an objective fact.”
Actually, no. The objective fact was that during ACES, invest, jobs, and margins were at all times highs. And the “rebate” they got were for reinvesting in Alaska. With SB 21, those deductions and credits can go anywhere in the world.
No on 1 supporters want it both ways: they want the picture of crippled little oil company, being taxed too punitively under ACES, but then they want to show that the industry is literally spending billions of dollars (we promise!!!!) in a little under a year that the tax law passed?
Sorry, it’s one or the other.
ACES was a fair share. And yes, you’re right, people acknowledge that it was a bit wonky at the high side. It saved us $17 billion and made us the richest state in the nation in spite of that.
And, oh by gosh, the oil companies didn’t pack up and leave. Stop being so bullied by these companies. Stop losing your cool over falling production. Throwing money at the oil companies, begging them to produce, while our state slides into deficits, is NOT the definition of prosperity, unless you happen to be the company reaping all the monetary benefits.
Wow, I sure wish my comment Voting Yes! could be featured on the front page of the blog.
Our constitution is different and we don’t have to beg them to produce.
Why Vote Yes?
BECAUSE IT’S OUR OIL
Of course every supporter of repeal wants to lower taxes at the high end relative to ACES and so by this standard we will be losing revenue if oil prices jump and production doesn’t fall considerably. In any event we were already headed down a path to poverty under ACES – anyone looking out the decline in TAPS and projected state revenue circa 2012 saw we were screwed because of declining production and the incredibly generous credit program under ACES where we were subsidizig over 75 % of the capital spend. The best way to ensure a sustainable future was to change the investment climate to get more companies, more investment, more drilling and more production and elinate the capital credits.
So is SB 21 achieving these objectives? We are seeing more drilling, new companies coming, more drilling and more production and we are no longer giving the big three huge rebates for their spending. This is simply an objective fact. Read Bradner’s story about all of the drilling. Read about all of the independents that are now moving forward w new drilling programs.
Thanks for the reply. The paradigm in Alaska is changing because we base our economy on a non-renewable resource and that resource is being exploited to economical termination. Also, we had our moment in the Sun following the start of TAPS; however, we are located where we are while the multinationals, who own the leases, have options in locations we do not.
Perhaps my objective approach to this issue is irritating to those who define a “non-renewable resource” as a resource which is actually perpetually renewable based on the assumption that more of that resource certainly can be discovered or extracted using more efficient methods and the further assumption that this resource in Alaska will always offer an appealing opportunity to those who extract that resource for profit.
I will mention that, while the legislature and Governor seem to see only state revenue as the problem, several of us see state spending as perhaps more of a concern and these same legislators who created SB21 and others are doing effectively nothing to address the spending excess. For example, despite the credible calculation that we are spending our state savings at a rate of about 7 million dollars per day, the Governor did not line item veto one penny from the current 12.8 billion dollar state budget and, to date, I haven’t heard a single legislator question that decision. Now I find myself not residing in a sovereign but in an investment bank willing to jeopardize our children’s future by investing in a multi-billion dollar gas line project. I understand that the legislature is already willing to immediately mortgage any gas contracts that might be realized from the AKLNG project in what I perceive as a desperate attempt to fund the current level of spending.
Roger Cremo was correct when he argued that we should not directly spend the revenue from our non- renewable resources, and only spend the income from that revenue. Perhaps that will be the final realization Alaskans will have the personal, albeit not pleasurable, satisfaction of understanding.
Mining law says a company gets a hefty tax write off as long as a company is in the exploration stage.
Think about it.
I apreciate Lynn Willis’ comment. As a regular reader of this blog, I have come to know and respect Willis’ political savy and understanding of government. Mr Kreiss-tomkins’ comment on the other hand made little sense to me. Then, I realized that he is a legislator from Sitka, a democrat and was recently acknowledged by the Washington Post for someone to watch under 40. Are you kidding me? With this kind of argumentative intellect? I would apreciate it if he had an original thought and wasn’t marching in lock step with the democratic oil haters. Mr Kreiss-Tomkins, I had heard some nice things about you; unfortunately, I now think they were probably misguided. Please try to keep more an open mind in the future. In the meantime, I’d vote for Lynn Willis over you anyday.
Lynn, I’m struck by this comment: “being able to clearly understand that this generation of politicians in the political majority have no idea what they are doing.”
Say, hypothetically, it turns out 28th Legislature “had no idea what [it was] doing.” By the time you, and the rest of Alaska, were to arrive at that realization, Alaska will have lost billions upon billions of dollars (if oil prices go up more than where they are now, which is when SB 21 starts costing literally billions upon billions of dollars).
The only win in this win-win would be the personal satisfaction of your realization. The billions upon billions of dollars will have forever left Alaska, never to be recouped, even if a future legislature were to pass legislation repealing SB 21.